2008-07-24 00:00:03 -
- Fitch Ratings has taken the following rating actions for Airplanes Pass-Through Trust (Airplanes) as outlined below:
--Class A-8 notes affirmed at 'BB';
--Class A-9 notes downgraded to 'CCC/DR3' from 'B+';
--Class B notes remain at 'C/DR6';
--Class C notes remain at 'C/DR6';
--Class D notes remain at 'C/DR6'.
Cash flow available to service
debt in the Airplanes transaction has declined over the past year, driven by a significant increase in monthly expenses, which has further stressed the transaction structure. While the class A notes are receiving current interest payments and partial minimum principal, the reliability of full principal payment on the class A-9 notes has declined. The rating differential between the A-8 and A-9 notes accounts for the fact that the A-8 is currently receiving the full benefit of class A principal payments.
In addition, the Airplanes portfolio contains significant concentrations in older generation, less fuel efficient aircraft types such as 737 Classics and MD-80s. These aircraft types are exposed to potential value and lease rate deterioration resulting from increased fuel prices, airline capacity reductions, and bankruptcies in the current environment.
Fitch's analysis incorporated expected cash flow to be available to the trust over the remaining life of the transaction. This expectation is based on several factors including aircraft age, current portfolio value, potential lease rates, and perceived liquidity of the portfolio. Lease rate and portfolio value expectations have been updated to reflect Fitch's views on certain aircraft given the aviation market volatility and significantly elevated fuel prices.
Airplanes originally issued $4.048 billion of notes in March 1996 followed by two refinancing trusts, one in March 1998 and the other in March 2001. Airplanes is a trust formed to conduct limited activities, including the buying, owning, leasing and selling of commercial jet aircraft. As of March 31, 2008 Airplanes' portfolio consisted of 121 aircraft compared to 193 at the time of the 2001 refinancing trust due to continuing asset sales. Primary servicing is being performed by General Electric Capital Aviation Services, GECAS (a wholly owned subsidiary of General Electric Capital Corp.), while the administrative agent role is being performed by AerCap Aviation Solutions (formerly Debis AirFinance)
Fitch will continue to monitor these, and all, aircraft securitizations and update ratings as warranted.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Fitch Ratings, Chicago
Bradley Sohl, 312-368-3127
Peter Manofsky, 312-368-2068
or
Media Relations:
Sandro Scenga, 212-908-0278, New York
